N.M. Regulator Accused of Intervening on Daughter’s Auto Insurance Claim

May 11, 2006

New Mexico State Insurance Superintendent Eric Serna intervened in an automobile accident insurance claim involving his daughter, according to documents obtained by obtained by a local newspaper, but Serna denies any wrongdoing.

“I never exerted any influence and I didn’t do anything improper,” said Serna, who has been placed on paid leave by the state Public Regulation Commission, which oversees the Insurance Division. That leave is unrelated to the automobile accident claim.

Serna and Erica Serna rejected an initial offer of $1,000 to settle the claim with Young America Insurance Co. over an October 2004 accident involving her car, according to documents provided to The New Mexican in response to a public records request filed by the Santa Fe newspaper.

Eric Serna last year asked John Gaherty, supervisor of the commission’s Insurance Claim Bureau, to help the Sernas with the claim, the documents said.

“The superintendent has requested I forward a request to you demanding your policy limits of $25,000 to bring this matter to a conclusion,” Gaherty wrote in a March 16, 2005, letter to a company representative.

The letter was written on Insurance Division letterhead, although Gaherty’s bureau is part of the commission’s Consumer Relations Division.

The insurance company eventually paid the $25,000 to Erica Serna, the documents said.

Gaherty said the Sernas rejected the initial claim over the accident for which Erica Serna sought money for medical bills and damage to her car.

In an internal commission memo, Gaherty said he never “applied undue influence on the insurance company due to the fact that the superintendent’s daughter is involved.”

Eric Serna said early this week it is not unusual for New Mexicans to file insurance claims on behalf of relatives.

He said his daughter’s claim did not receive any special treatment, and he forwarded it to the Consumer Relations Division because he wanted to avoid any appearance of impropriety.

But Juan Rios, director of the Consumer Relations Division, criticized Gaherty’s handling of Serna’s complaint in an April 18, 2005, memo to Gaherty.

“The manner in which this case was initiated has, at the very least, created a potential for unwarranted criticism of the Insurance Complaint Bureau, the Consumer Relations Division, the superintendent of insurance and even the Public Regulation Commission,” Rios wrote.

A Legislative Finance Committee audit of the Insurance Division’s management practices released last October referred to the complaint, but did not mention Serna’s name.

The audit said complaints related to commission employees received “exceptional treatment” and noted that Gaherty’s letter to the insurance company mentioned the employee by name once and by job title five times.

“Using the name of a specific PRC employee in written communication with an insurance company was not noted in other complaint files,” the audit said.

Eric Serna said the $25,000 settlement did not come close to covering his daughter’s medical bills from the accident.

Insurance documents show $2,515 in damages to the car, but Erica Serna’s medical records were removed from her file.

The PRC this week extended Serna’s paid leave to June 9 while the attorney general investigates a contract between the Insurance Division and a Santa Fe bank that made hefty contributions to a nonprofit foundation led by Serna.

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